EA is usually the first company mentioned when people complain about game developers making unimaginative bad sequels instead of innovative good games. EA, due to sheer size, is also the company whose games are getting pirated the most. Now EA is laying off 1500 people, and there is an outrage among gamers. What did people think would happen to a company making bad games and being constantly robbed, in the middle of an economic crisis? If you wanted to save an EA programmer's job, all you had to do was buy some EA games legitimately.
- posted by Tobold Stoutfoot @ 10:15 AM Permanent Link
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The people getting laid off were not actually making "bad games." From the transcript of the call today:

You're quoting the wrong part of the news. EA announced losses in the second fiscal quarter of $391 million. And while they didn't say which games would be affected by the layoffs, they said that it would be from the bottom third of the sales. It's not the people from the 17 titles with an 80+ rating that are getting fired, but the those of the countless EA titles with a much worse rating and sales.

Well I've just bought Dragon Age so that should add some money to their purses.

I'm glad to see that game doesn't have the horrible 3 strikes and you're out Mass Effect DRM as I passed on that game for that reason. Did pick it up recently from steam which doesn't have the restriction.

-

It's not the people from the 17 titles with an 80+ rating that are getting fired, but the those of the countless EA titles with a much worse rating and sales.

If you wanted to save an EA programmer's job, all you had to do was buy some EA games legitimately.

Why would I care if programmers of bad games get fired? You seem to say "Create a good game and get rewarded". Which is the way I like it.

That's not too fair on EA. They've made far more new IP games in the last year or so compared to the half decade before - Mirror's Edge, Dead Space etc. Admittedly Mirror's Edge wasn't great and Dead Space should have sold better, but at least they are investing in new IPs rather than coughing out more sequels (hello Activision), EA Sports excluded.

You know what? If EA sold games digitally for 20 euros this would not happen. Fifa 10 is a 50 euros digital download, as much as we paid for packaged games, which comprise a printed manual, a printed box, a DVD and stuff. have a look at EA's online store, prices are just ridiculous, piracy would be defeated in a whiff if they embraced price reduction, sales volume would go up. Piracy in this case is just an excuse.

"Electronic Arts has a core slate of games label and sports franchises that we will iterate on a either annual or bi-annual basis. And I think you know what those major titles are - all of them are selling or have sold in their most recent edition 2 million units or more," he detailed.

"After that, we've got The Sims and Hasbro, and frankly anything that doesn't measure up to looking like it can pencil out to be in very high profit contributor and high unit seller got cut from our title slate from this point going forward."

I think we cannot say for sure is due to piracy. I think that the ones who made possible for me to play a game that I've enjoyed should be compensated, don't get me wrong, but there's no basis to assume that all the piracy will translate into sales if people are unable to download stuff.I believe that the only businesses who really took a hit from piracy are dvd and game rental shops.We will soon know if I'm right or not when the newly voted piracy laws are implemented in E.U.

Press releases about layoffs following losses are designed to calm investors, and give them the impression that the company has a strategy to do better in the future. Of course problems like failed games and piracy aren't mentioned by Ricitello, that would have been counterproductive to the message.

Concentrating on games that EA *knows* will be profitable, as well as equally profitable Facebook games is part of this "positive outlook" announcement. And what exactly do you think is wrong with that? You're not trying to tell me that sequels and social network games aren't extremely profitable, are you?

You're looking at this from a completely wrong angle, only considering what you think are the better games. Of course I would rather play WAR than FarmVille. But then I would rather *own* FarmVille than WAR, because FarmVille is wildly profitable, and WAR probably still hasn't even paid back its development cost.

I bought Dead Space from the EA store for €5 a few weeks ago. Other games up there were the recent C&C game, Mirrors Edge,...

Not that EA store is my favorite shop. The fact that they limit your download time to 1 year is a real bummer. I like having my games stored online. If I want to play one I'll just download it. And it's a lot safer then a dvd or fragile harddisk.

And yes, for new games the prices are outrageous. It's always cheaper to let a retail game fly over form the UK to Belgium. It'll save me at least €15.

I think EA used to be a "big bad" of the video game industry when it came to pumping out sequels, but in my mind they really turned their image around in the last year and a half. If you want to talk about a company just pushing out as many terrible redundant sequels as possible, you only have to look to Activision, the company that will turn down publishing games that they can't "make a franchise out of". I do my best to avoid buying Activision games.

You brought up piracy as an implicit cause of EA's losses but piracy is not nearly as prevalent for the console market as it is on the PC. Piracy seems to be relevant here insofar as major publishers, like EA, have been driven to consoles that are effectively walled gardens. The trade off is higher licensing fees and development costs that eat into profits and make each new title comparatively riskier than it would have been to develop and release on the PC.

Also EA has been progressive in the recent past with some of their titles, publishing Mirror's Edge and Dead Space to critical if not commercial acclaim. Dead Space: Extraction was universally regarded as an excellent title for the Wii yet sold in the tens of thousands. For the most part EA isn't publishing bad games but rather the wrong games on the wrong platforms or perhaps without appropriate marketing.

Is there ANY evidence that piracy costs a company money? No. Pirates don't buy games. These are not lost sales. The only time piracy affects a companies bottom line is when they fail to authenticate legitimate copies when providing support or online services.

Piracy IS wrong, but its equally as wrong to continually use it as a scapegoat for failed projects or failing companies (no, I'm not trying to say EA is a failing company).

These layoffs are in line with the entire economic climate currently. Lets not blame something that was just as prevalent during the best of economic times.

Is there ANY evidence that piracy costs a company money? No. Pirates don't buy games.

That is like saying shoplifters don't buy groceries, completely ridiculous. Of course pirates *would* buy games if they couldn't pirate them.

I think that both the pirates and the anti-pirates are using numbers wrong here. A pirate with $1,000 worth of pirates games (or music, or films) on his hard drive did *not* cause $1,000 worth of damage to the respective industry, because he wouldn't have bought that much stuff if he had had to pay for it. But the damage also is *not* $0, because if he would somehow be prevented from pirating, he would certainly have bought a couple of games. So the damage is maybe $100 or $200, neither $0 nor $1,000.

"You know what? If EA sold games digitally for 20 euros this would not happen. Fifa 10 is a 50 euros digital download, as much as we paid for packaged games, which comprise a printed manual, a printed box, a DVD and stuff. have a look at EA's online store, prices are just ridiculous, piracy would be defeated in a whiff if they embraced price reduction, sales volume would go up. Piracy in this case is just an excuse."

@ Rocco

I'm sorry, but this reasoning is pure and utter nonsense. People will pirate games no matter what the cost is.

Will higher prices generate a bit more piracy? Sure they will, BUT lets be honest with ourselves here...Pirates download games because they get them for free. Free is cheaper then whatever amount a publisher wants to charge for their game.

You can try to justify pirating to yourself and others all you want but at the end of the day a pirate does what he does because 1) It's easy and 2) It's free.

Even if games were 20 USDs across the board we'd still have piracy. (and in fact we still DO have piracy of cheaper games) Would we have a little less piracy? Sure, we probably would, but it certainly wouldn't decrease as much as people with your reasoning seem to think it would.

OT: It's always sad to see people lose their jobs. I don't understand the backlash against EA though. They are a business having to lay people off in slow periods is something all businesses do. It sucks to see it happen, but you can't expect EA to keep paying these people if it isn't beneficial to their company.

Why? Because somewhere in between I threw them away and thought that I'd never play that again. Still, I did.

Since the costs of that didn't nearly eat the profits I made each time by selling my woW account, it's probably ok :)

Until the Activision boss made those absurd comments some months ago and Blizzard introduced MT, I actually liked Blizzard quite a lot and didn't mind to give them a little bit extra money for the good work.

I dont see the big issue. I work in IT in a Oil & Gas city. Engineers here get laid of daily (well not that much anymore) and its just second nature here. No big projects so they get laid off. Same can be said with Programmers. Big companies are making less games these days to get through the harder times.

Granted on the flip side of things these companies should be puting out less games with less over head, but better games.

If you want evidence of game piracy, check out this iPhone developer's data. Three people stole the game for every one who bought it, despite the game only costing $4, being available for immediate download, and requiring a jailbroken iPhone to even steal. For more data, check out World of Goo, which had a 90% rate of piracy at release. On the one year anniversary they did a pay-what-you-want promotion with pretty good results, if you consider $3 a fair price for a well made PC game with universal acclaim.

People don't steal games because it's more convenient or because games are too expensive. They steal games because they're thieves. (And to be honest, I've stolen games myself, too. But I don't kid myself about the ethics of doing it.)

But all this talk of piracy is a bit of a red herring with EA. They already build in piracy rates in their business models, their current problems are much more systemic and a product of the times. And of course piracy has very little to do with MMOs like Warhammer Online.

@tobold: grocery store comparison is not valid - you won't die of hunger if you don't play a game

There is no question that piracy costs the industry some coin. But how much is the cost of the anti-piracy stuff. From licensing SECUROM and other technologies , to lost opportunities to reaching larger audiences ... I am not certain that they come out ahead

Moreover - a badly designeed game, with subtantial flaws are far more damaging than any number of pirates.

Finally - why isn't a company allowed to fire its employees? Are you suggesting that this is deplorable? No it is capitalism ... if the people who were fired are talented and hard working individuals they have nothing to worry about.

"But the damage also is *not* $0, because if he would somehow be prevented from pirating, he would certainly have bought a couple of games."

I don't think you can make that assumption. I have some friends (one of them between quotes if you know what I mean) that download the occasional game but will spend their money on the games that they like and want to have. The other games if they are available, fine, if not they wouldn't even dream of buying them.Companies are wrong nowadays in wanting people to trade "ethereal goods" the same way they traded goods in the XX century and they should adapt their business model to today.Sell services, not strings of numbers...

Maybe if EA wants to sell more games they should take the Schooner Tuna approach. Anyone who remembers the '83 movie Mr.Mom will recall how she shook up the industry with the idea: “Tuna with a heart,” based on her experiences as a stay-at-home Mom. The pitch: reduce the price of each can of the premium Schooner Tuna by $.50 to help families through the tough times. I love this idea. Drop the price of all your titles by $15-20 bucks and watch me go to the store to buy them. I just can't justify spending $60. for a new game with this crap economy anymore.

When I say I always buy my software, games, movies, everything, people are always astonished, and some even laugh at me calling me an idiot.And when I say they're actually stealing, they always respond with the same ignorance or dumb 'arguments'.Stop making excuses already.

Are you saying that if the pirates somehow couldn't steal games, they would not play ANY GAMES AT ALL? That is downright ridiculous. It's not your lack of energy that prevents you from linking the numbers, it's that the numbers simply don't exist.

An interesting thing with piracy in games is that I have still never seen the now-standard argument from the music-lifters: "we're entitled to this, it is the way of the future". Gamers apparently still stick to the battle-tested "us pirates would never buy your stinking pile of goo and even if we might have we'll now generate more sales since we're influencing all our pals to buy your stuff". A touch ironic, perhaps, that gamers should be so behind the times!

(Sorry for the off-topic comment. Perhaps it's time for a refreshing piracy post/debate? :))

My point: If Internet had been around for forever, nobody had even come up with the ridiculous idea that you could own digital information.

The only ways to enforce digital ownership is the Chinese internet regulation (nobody here wants this, I guess), massive problems for the 'buyers' (copy protection) and draconian punishment (no internet connection for the rest of your life - France, yeah!).

I do not think that digital information shouldn't be possible to sell. I just think that it is impossible to sell and therefore companies should adjust and sell services (like a login to WoW Servers), not digital information.

The problem is that people have a choice between paying $50+ for a game that might be garbage, or downloading it and playing it for absolutely free.

If every single game that came out also had a demo or free trial period, I think a great deal of piracy would decrease. Let people see and experience your good game, and they won't be as wary of spending their money.

And as it's been said already, lower the prices and lower piracy.

I understand that a game may cost millions of dollars to make, but it isn't the same as producing tangible items like cars. Charge less for games, and more people will spend their money.

The music and game industry fret about piracy while they stick to their arbitrary $20 per CD/$50+ per game price. Give it a break already. It's been said, but I can download a game in 3 hours with a torrent program for free...or pay $50+ and wait 3 days to get the same game through the mail.

Stop making piracy so appealing to your potential customers and maybe they won't be so potential.

"If you wanted to save an EA programmer's job, all you had to do was buy some EA games legitimately."

I'm not sure I buy this statement. Are people not buying EA games because 1) they are pirating them or 2) because they are poor quality or 3) because they simply don't have the disposable income they used to? You're making a big assumption going with number 1 and ignoring all the other economic factors we currently face. There are many, many other business who are experiencing similar situations. Are we going to blame Sprint's 2500 layoffs on piracy as well? Not to mention the fact that even if EA sold more games they could still be in the same boat because of poor business decisions.

Also, comparing piracy to shoplifting in a grocery store is never going to strengthen your argument, Tobold. One is a digital product that can be duplicated and copied infinitely while the original owner still has possession...the other is a physical item that once taken denies the owner the ability to sell it to a paying customer. It's an apples-to-oranges comparison, if you'll pardon the pun.

Unless you've found a way to get inside the mind of a pirate, there is no way you can support the claim that their download equals a lost sale. It's just as plausible to suppose they download a game because they can, not because they have any intention of going out any buying it.

I'm not sure I buy this statement. Are people not buying EA games because 1) they are pirating them or 2) because they are poor quality or 3) because they simply don't have the disposable income they used to?

Commenters are concentrating on 1), but I actually said it all three of them. My point was that people shouldn't be so surprised if EA is laying off people, given that all three factors reduce EA's revenue.

So you are saying if EA spends several million dollars to create a game like Dragon Age: Origins, they end up with something that isn't theirs?

A) You are wrongandB) If you weren't so wrong about that, companies would simply not create any digital content any more, making us all less well off in the process.

Just because digital information is *easy* to steal, and doesn't disappear from where you copied it from, doesn't make piracy any less theft of intellectual property.

And I clearly said not every pirated copy is a $50 loss to EA, but claiming that NONE of the people playing a pirated copy would ever have bought that game instead is obviously false. Piracy causes losses to creators of intellectual property, and every game studio closing down is partially YOUR fault, you dirty pirate!

Pirate B: The majority of pirates, they downloan more games then they could ever play, and enjoy. These guys play games for 10 minutes and move on. They are really more like hoarders with their portable hard drive then they are thiefs. They enjoy collecting as much media as they can. These people severly distort piracy figures.

I agree there is a loss to the publisher based on piracy but it is not nearly as substantial is release hundreds of games per year with only a handfull of actual quality titles.

>And I clearly said not every pirated copy is a $50 loss to EA, but claiming that NONE of the people playing a pirated copy would ever have bought that game instead is obviously false. Piracy causes losses to creators of intellectual property, and every game studio closing down is partially YOUR fault, you dirty pirate!

You're wrong. It only causes a loss to the extent that the creator's sales fall below the production cost. If a game cost $20 million to make, earned $40 million in profits, and had another $60 million worth in "pirated copies;" and EVEN conceding your point that *some* pirates would have bought it who didn't (which itself is not necessarily true); this still isn't a "loss" to the company. What they're pissed about is how much PERCEIVED profit they think they deserve to make.

There's a significant fraction of "pirates" who would *not* buy the game if it was impossible to get for free (someone might buy the Sims3, but won't buy 9 expansions). They just wouldn't play it at all. There are of course people who *would* still buy it, and that's a market that publishers/developers need to figure out a way to get a piece of; like through special sales, increased demos, etc.

But back when I was in middle school my friend brought his copy of Doom over, installed it on my computer, and we spent hours deathmatching and co-oping through the game. 10-15 years later, I bought Doom3 for $50. It's downright offensive to castigate those kind of everyday situations as if people are EVIL sinister thieves and pirates.

In his youth, Mr. Pirate (Mr. P) had a LOT of time on his hands. He liked to occupy that time with lots and lots of games.

Mr. P couldn't afford all of them, so he pirated some - swapping with friends. He DID still buy some though... until he was burned a few times, and his hard-earned money went down the flusher with draconian refund policies. Sometimes the games were garbage. Worse, sometimes they didn't even WORK! Well, with a blender, you can take it back to sears if you're not satisfied. Not so with games. Open package? You can't get your money back.

As a result, it became Mr. P's personal policy to pirate first, and buy it later if he liked it. Mr. P preferred this to speculating in advance about whether a game was good, or whether it worked. Better to be sure of it first!!!

Naturally, human nature took over. Once the game was in hand, even if it was good, why purchase it? Mr. P felt occasional pangs of guilt, but sometimes, the price of the games was simply too high for someone in his youth. He did still buy the occasional exceptional game, but his personal policy was left wanting.

Then time took over, and Mr. P grew older. As he grew older, Mr. P suddenly had more disposable income than before, but far less disposable time. At the same time, the internet and its development meant that Mr. P would know quickly about whether a game was good or not!

Because of these factors, Mr. Pirate slowly changed to Mr. Upstanding Citizen. Mr. UC now pays for every game he plays. Part of this is that less disposable time means more patience. Mr. UC takes a long time to get through a game, so Mr. UC can be choosey. Mr. UC lets many good games go, because he has time for only the truly great ones. And Mr. UC has enough to pay for the smaller subset he's interested in. In fact, Mr. UC often can't get to a great game on his list for quite awhile at times, and it gets even better, because they get cheaper with age!

Does Mr. UC's story sound similar to your own?

I believe that the reason EA is laying people off has less to do with pirates, and more to do with the fact that people are increasingly aware of which games are good and which games are bad.

Are you saying that if the pirates somehow couldn't steal games, they would not play ANY GAMES AT ALL? That is downright ridiculous. It's not your lack of energy that prevents you from linking the numbers, it's that the numbers simply don't exist.

I'm sorry, but you are wrong here. I know you are well off, but there ARE people who literally can't afford games. Being brought up in a poor family and with poor friends, I knew plenty of people that would have loved to play video games but whose families literally couldn't afford any. And so their only chance to do it was at another friend's house.

Yes, this only really applies to teenagers who have yet to find a job since it's hard to be COMPLETELY unable to afford a game, even with bills piling up, after that point. A good portion of pirates ARE teenagers though. And for you to deny that they exist entirely is equally as ignorant as someone claiming that pirating doesn't hurt anyone.

" The most important reason for piracy was (and sometimes still is): Speed of delivery."

I would have agreed two years ago. Find a torrent, load it and an hour later you're playing. Before you'd have to either wait days for the shop to send it to you or go outside and actually buy a game.

These days however we've got a ton of online shops. It goes as fast as "order game -> enter credit card safety number -> wait 5s -> download game". And the downloading of services like steam will be faster then a torrent.

As Nelson above alluded to, I would be very surprised to learn that EA, now past the 25 year mark in the software business, has not been able to include software piracy in their revenue forecasting model and plan accordingly.

That does not mean I condone piracy nor am I trying to minimize the impact of piracy.

But somebody at EA knows a lot better how prevalent it is and how much it costs EA (both in preventative measures as well as in lost sales) than anybody in this thread. EA should be using that knowledge for their planning.

We're looking at their 11th straight quarterly loss. That only comes through business decisions not in sync with the times.

Dead Space: Extraction's problem wasn't piracy OR being a bad game. The problem was that they developed it for a system people buy for party games and a balance board they think will magically make them skinny.

While pirating of games and over all poor quality are two very important factors in today's lay offs, another important one is the Romanesque business model of EA. Namely, conquer or perish. The Romans found out the hard way that if you over expand yourself without a care to protecting and strengthening what you already have, it will end badly for you some day. Even companies, and not just nations could learn that rule as well.

I know you are well off, but there ARE people who literally can't afford games.

I wasn't saying that EVERY pirate would go out and buy games instead if he couldn't steal them so easily. But that doesn't change my point: Piracy does cost game companies money. Game companies lacking money will fire people. Thus pirates are partly responsible for the layoffs. As they are partly responsible for the DRM crap I have to endure as legit buyer.

It is very interesting seeing that many people feel entitled to playing games, claiming that it is ok to pirate a game if you are too poor to buy it... Applying this to my situation would lead to: "I would like driving a Ferrari, though as I can't afford it, I'll grab myself one at the factory, they have so many standing around, no one is hurt".

In the Romans case they really had no choice. Maintaining the Empire was very expensive and without constant expansion it would've collapsed under it's own weight.

Constant expansion and the subsequently ransack of the conquered civilizations was one of the factors that kept the Romans going for almost 1000 years.

Perhaps the same can be said about modern companies. I'm not an expert but I think it's easier to get financing when you are expanding your business than when you are consolidating, so I always take these news of mergers and acquisitions with a grain of salt. Who knows if the expansion is just a mean of postponing the inevitable. All in all, large investment and lay offs don't seem natural to go hand in hand.

If I steal your Ferrari, you won't have the Ferrari anymore. If I steal your game disk, you won't have it anymore. But if I copy your game, you still have it.

I am all for compensating the ones who worked or invested in order for me to have that product available, that's not the issue but it seems to me, though, that piracy is a big umbrella that gets the blame for poor financial results rather than the company products or business model.

Think about F2P games. Some of them have millions of users. Slap a sub on them and how many users you think would remain? The same with gaming. Most people will gladly play a game for free if they can but would never buy it otherwise.

I think Dragon Age Origins is built to partially benefit from the distribution channel built by the pirates. The practical side of it is the increased value from the experience which you can get from the payed version.

The reason why pirating is such a big problem is a long lasting and dysfunctional idea about IP. Technology has practically invalidated the legislated structure of monetizing IP, since big companies tend to trust to legislation this will hurt them a lot. And they will eventually move more towards the "service model" for making money.

Let the pirates handle distribution and make the players pay for value which is packaged as a positively experienced trojan within the pirated game clients. ^^

I ask this because a lot of commmentors here seem to forget that distinction.

It also goes to the core issue of explaining how this dinosaur model of funding and getting games to the masses is in dire need of an overhaul. One look at how long the publisher of Duke Nukem Forever carried the Developer should be enough to prove just how broken the industry is.

There's been a lot of grumbling about how EA did business during the last few years. I didn't buy their games unless there was something really good out, because I disagreed with them. I think there were more people like me.

I also had a chance to see first and how EA grew. I observed how they entered a new market in Europe. It was an all out assault - the bought one of the most expensive office spaces in the city, outsourced most PR & marketing to extremely costly agencies and bought ad spaces in idiotic, yet trendy spots. I'm guessing the management lost control some time ago.

Hey Tobold. I just got Dragon Age from EA. I think they seriously messed up this game, the difficulty is absurd, the game design is flawed, you can fully hose yourself making a few bad decisions ... I enormously unhappy with the product after playing a few hours. One of the most frustrating experiences I have had.

Where do I go to return the product and get my money back?

*crickets* *crickets*

Hmmm ... I can return a green watermelon to the grocery store, I can return a book to Amazon, I can return a laptop to Best Buy, I can return a tool to the hardware store (I got lifetime warranty on that!) - strangely the only thing that I cannot return is the game I bought from EA...

So there you have it - I have little sympathy for anyone crying about pirates when I can't hold the company responsible for the quality of their products either.

To the last Anonymous, you complaining about a no-returns policy... Read the previous Anonymous' comment. I think it sums the whole thing up quite nicely.

And also. Company X won't allow me to return stuff I bought from them so now they lost their right to complain that people are stealing from them?

If it's really important for you to be able to return a game, then go buy it at some store that allows returns (Best Buy, perhaps?).

I share that sentiment with you, Anonymous. The argument that "noone would have come up with the idea that you can own digital information" is often brought up in these kinds of discussion. Says who? There is no inherent difference between information that is "digital" and such as is "analog". Information is information. The medium differs, and it is easier to copy stuff now, but the fact remains that intellectual property conventions and laws were devised to prevent exactly what is happening with digital piracy today.

The price you pay for that book is not based on what it costs to print it. The price you pay for that Ferrari is not based on what it costs to make it. The price you pay for your [I'm clueless about fashion brands, so pick one] shirt is not based on what it costs to make it. The prices for these items are mainly based on what the value of their brand is. Always, we hear from the digital cowboys/-girls that digital is different. But screw this stuff about "if I copy it you still have the original unchanged": yes, that is exactly what is happening with bootlegging.

Noone "loses" money if I Xerox Paul Auster's latest book and read it. In fact, I didn't like it so I called him and wanted him to pay me my money back. That sonnofab... told me he wouldn't do it, that I can't get a refund from him. What a moron. Now I'm so pissed I'm going to reprint it myself and sell it to all my friends at cost. I'm telling you, the guy (and his silly capitalistic publisher) has been ripping us off completely! I paid like 30 bucks for that book, but buy it from me and it'll be less than a dollar.